If I Use An FHA Loan, Can I Rent My Home Out As An Investment Property?

February 28, 2018 By Dawn

Be careful renting out a home if you finance through a loan backed by the Federal Housing Administration. An FHA loan is meant to help people find homes to live in. It’s not supposed to help people purchase income properties. The agency prohibits homeowners from taking advantage of their program in order to build an investment portfolio.

Of course, that doesn’t mean it’s never allowed. The agency specifically outlines rules. For example, if you have to relocate to a new place outside of a reasonable commute to work, FHA may allow you to rent out a home financed through a loan backed by the agency. Additionally, if you have more children than your current house has room for, FHA makes an exception. Regardless though, you’d need to live in the home for most of the first year before considering renting it.

If you choose to rent out the home and they allow it, they might require you to wait to move out until the loan-to-value ratio is 75 percent. They might require a new appraisal too. Alternately, the agency might allow you to pay the loan down to that LTV in advance in order to move forward with rental plans if your family size grows.

Simply put though, the agency is aware than people may try to buy a home using an FHA loan with the intent to use it as a rental property and have provisions in place to make sure that doesn’t happen.

Are You Buying a Home on Marco Island?

Considering buying a home on Marco Island? We’d love to help you find one that’s just right for your needs.

Call us at 239-821-7926 or get in touch with us online to let us know what you’re looking for. We’ll start searching right away. In the meantime, please explore our:

Are You Financially Prepared to Buy a New Home? Use This Checklist

January 26, 2018 By Angie Johnston

You want to buy a new home but aren’t sure if you can afford it. Use this financial checklist as a guide before you attempt to take the plunge.

Consider Your Budget

Can you afford to buy a home? All of your necessary purchases, including mortgage, utilities, groceries, car payments, insurance premiums, and gasoline should add up to no more than 50 percent of your total income, according to bankruptcy expert Elizabeth Warren.

Evaluate Your Debt

Do you have any high-interest debt, which is debt that’s above an 8 percent interest rate? If you do, then you might not be ready to purchase a home, and you should focus on paying off that high-interest debt. This is important because you’ll need to make a downpayment on your home. Also, you’ll have to cover inspection and closing costs, and some of this might come out of pocket. You’ll want to decorate and furnish your home, adding to your expenditures. And, down the road, you’ve got to be prepared for maintenance and repair costs, too.

Consider Your Emergency Savings

Ideally, you should have three to six months of your basic living expenses saved up to use for emergencies like losing your job, or your car unexpectedly breaking down. Having an emergency fund can help prevent financial disaster.

Save for Retirement

Does your job offer a 401k? If so, you should contribute at least enough to get the full employer match. If you don’t have a workplace plan, you should open an IRA, an Individual Retirement Account, and contribute at least 10 to 15 percent of your earnings. IRAs are an especially wise choice for those who are self-employed, and for those whose jobs don’t offer a benefits package.

Are You Buying a Home on Marco Island?

Considering buying a home on Marco Island? We’d love to help you find one that’s just right for your needs.

Call us at 239-821-7926 or get in touch with us online to let us know what you’re looking for. We’ll start searching right away. In the meantime, please explore our:

What is a VA Loan?

November 18, 2015 By Angie Johnston

If you’ve received an honorable discharge from any branch of the U.S. Armed Forces, or if you’re currently serving in the military, you’re eligible to use a VA loan. In many cases, a VA loan helps the borrower get more favorable terms than he or she would get with a conventional loan — but what are the benefits, and could it be a good idea for you to use one?

What Is a VA Loan?

A VA loan is a traditional loan backed by the Department of Veterans Affairs.

Because the VA backs these loans, lenders are often more willing to extend credit on favorable terms.

Benefits of VA Loans

Some of the benefits of VA loans include:

Borrowers don’t need a down payment (as long as the home’s sale price doesn’t exceed its appraised value)
Borrowers don’t need to purchase private mortgage insurance, or PMI
In some cases, the seller can pay closing costs
There is no prepayment penalty if a borrower chooses to pay off the loan early
Borrowers who have a difficult time making payments may qualify for help from the Veterans Administration

You don’t have to be a first-time homebuyer to use your VA loan, and you can reuse the benefit as many times as you like (the only catch is that you must pay off one VA loan before you open another).

Who’s Eligible for VA Loans?

If you have an honorable discharge from any branch of the military, or if you’re currently serving — even in the reserve components — you could be eligible for a VA loan. Some surviving spouses are also eligible.

Are You Looking for a House on Marco Island?

If you’re buying a home on Marco Island, whether you’re searching in Tigertail Beach, Cape Marco or elsewhere, we can help.

Call us at 239.821.7926 or get in touch with us online. We’ll begin searching for homes that meet your needs right away.

Property Search

If I Use An FHA Loan, Can I Rent My Home Out As An Investment Property?

Are You Buying a Home on Marco Island?

Are You Financially Prepared to Buy a New Home? Use This Checklist

Consider Your Budget

Evaluate Your Debt

Consider Your Emergency Savings

Save for Retirement

Are You Buying a Home on Marco Island?

What is a VA Loan?

What Is a VA Loan?

Benefits of VA Loans

Who’s Eligible for VA Loans?

Are You Looking for a House on Marco Island?

Contact Cathy

Marco Island Real Estate Search

List of Churches in Marco Island

Enjoy Your Retirement With These Two Great Golf Courses On Marco Island

Need A First Floor Condo On Marco Island?

…



	Optional Criteria


*When choosing a specific Condo Name, you MUST choose a Property Type Advanced Search Options